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The increase in earnings per share that comes against a firm acquires another firm with a P/E ratio lower than its original price-earnings ratio.
And this phenomenon is solely because of the merge. The stock price does not matter.
When a corporation merges a comparatively small company with a lower P/E ratio,there wil be a false growth in the corporation's earnings per share.
by BarryPotter October 06, 2006
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